The United States Securities and Exchange Commission (SEC) has taken legal action against Kraken, a cryptocurrency exchange.
The United States Securities and Exchange Commission (SEC) has taken legal action against Kraken, a cryptocurrency exchange, alleging that it mixed customer funds and operated without proper registration as a securities exchange, broker, dealer, or clearing agency.
The complaint was filed in a federal court in San Francisco on November 20 and asserts that Kraken has been facilitating the buying and selling of cryptocurrencies in violation of the law since 2018.
This lawsuit is part of the SEC's ongoing efforts, led by Gary Gensler, to assert regulatory authority over the cryptocurrency industry.
According to the SEC, Kraken's internal controls and business practices were inadequate, resulting in the mixing of customer assets worth up to $33 billion with the exchange's own funds. As a consequence, the SEC contends that clients faced a substantial risk of financial loss. Additionally, the complaint alleges that Kraken used customer asset accounts to directly cover operational expenses.
Kraken has strongly refuted the SEC's accusations, expressing its intention to mount a strong defense in court. The exchange argues that the commingling claims made by the SEC simply stem from using fees that were already earned and notes that the regulator has not alleged any missing user funds.
Let us know what you loved about this article, what could be improved, or share any other feedback by filling out this short form.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators.
This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.
The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
